About this Show

Street Smart with Trish Regan and Adam Johnson

NETWORK

DURATION
02:01:00

RATING

SCANNED IN
San Francisco, CA, USA

SOURCE
Comcast Cable

TUNER
Channel v821

VIDEO CODEC
mpeg2video

AUDIO CODEC
ac3

PIXEL WIDTH
1920

PIXEL HEIGHT
1080

TOPIC FREQUENCY

Us 14, Ukraine 11, U.s. 10, Beijing 8, Tesla 6, S&p 5, Sears 4, America 4, Brooklyn 4, Carl Icahn 4, Carl Levin 3, Matt Miller 3, Coors 3, China 3, Volkswagen 3, Washington 3, Gordon 2, Trish 2, Barclays 2, Brinkley 2,
Borrow a DVD
of this show
  Bloomberg    Street Smart with Trish Regan and Adam Johnson  

    February 26, 2014
    3:00 - 5:01pm EST  

3:00pm
of this weather issue. practiced by the polar vortex, we may not be going to the mall. but people are going out to look for new homes. thank you adrian miller from gmp. we will be back in 30 minutes. -- on the markets in 30 minutes. "street smart" starts next. >> stocks still flip-flopping gains and losses as we flirt with record highs. welcome to the most important hour of the session. 59 minutes to go to the closing bell. matt and i are scouting your first trade for tomorrow. 1848. >> 1848. but we are not doing too badly considering how are ugly this year started out. back to even. and even keel here. we want to get some individual stories in this market.
3:01pm
it's not all about the broad indexes, is it? >> absolutely. biget's get a look at the three right now. >> target has a lot of attention because of the data breach of credit card information. that caused a lot of problems. its main income actually fell 46%. the company incurred costs. also people stayed away the -- away from the stores. nevertheless, the shares are up. people look forward to the spring and hopefully some better numbers. lows -- this has really been the 's,ght spots within -- lowe this has really been the bright spot within retail. doing renovations in their homes. lowe's up.
3:02pm
the largest u.s. solar manufacturer announcing a plunge in their earnings. revenue for when it delivers, but it has not been booking new projects. that is why we see a big decline in the profits and the shares as well, guys. for the big story. the house ways and means committee is planning a huge change to tax cuts. what are they planning? >> this would collapse seven brackets into two brackets for essentially all taxable income, ensuring 99% of taxpayers face maximum rates of 25% or less. specifically, this is how he will do it. theof americans would be in 25% tax bracket.
3:03pm
those who are above that would be hit with an additional rates. this would make filing a lot more >>, because instead of seven tax brackets we would be down to two, or i guess at least three. you would have that additional 10% tax for those making over 100 $50,000. moreover, it would end the unequal treatment for the carried interest private equity managers pay themselves. does this plan have legs? we are joined by the american action forum director of fiscal -- gordon, i will start with you. is there a chance we could see something like this get through congress? be great. that would there is a lot of debate out there about how big an effect
3:04pm
tax reform could have on it, but i think there is a broad consensus that in general it is universally positive. if you ask anybody out there, should we do something good for the economy, most people would say yes. yes, we should. >> is it good for the economy? i immediately thought, hmm, if i made close to $450,000, i would want to make sure i get under that level. do you think people will be saying the same thing? code today there are plenty of opportunities to find tax shelters and shipped your income around. this is meant to address some of those tax shelters and loopholes, but it introduces new ones. the 10% surtax threshold, the definition of income attached to it --
3:05pm
>> but at least the numbers -- it used to be 250 thousand dollars was the magic number where you hit another bracket. at least the number is going up here. >> there are a number of provisions. there are provisions that taken at the $250,000 level. there is itemized deductions at about that level. there is the new tim percent bracket -- quite asnot sounding easy as they want us to think then. >> there is a lot in here. i would not call it simple. it is complicated. it is possibly simpler than the current tax code, which is complicated. >> is it possible to be more complex than the current tax code? that is the question. heard thatn i
3:06pm
someone wanted to lower the rate and broaden the base, i immediately said it's not going to happen. people in washington are paid the money for these loopholes. that is how they get paid the money, are reelected. >> sure. changes toly is true the tax code actually get pas sed? 100hen you look at the years of the tax code and the paucity of real reforms, that ought to tell you something about how hard it is to do. the chairman putting out a real raposo, and quite frankly enough in there to spin off every one of those special interests -- first of all, i think that is a good sign. if you have ticked off everybody, that is an indication of the broad reform we need. >> carried interest rates are
3:07pm
interesting. how was it -- we talk about income inequality and we're trying to have a discussion about that, how is it fair that someone who makes $300,000 has seen their tax rate go up where is someone who makes three injured billion dollars has not dollars hasmillion not seen an increase? do we not need to change this so people are paying 15% when they should be paying 39%? >> well -- >> and that is a very complicated area of the tax code. you can argue for it and against it. i think the carried interest rule is a gray area, somewhere between investment income and standard wages -- >> how is that a gray area? you have private equity bankers paying themselves and only paying 15% tax rate. >> right, because it is
3:08pm
considered investment income under the tax code that is currently stated. >> so does that need to change? >> i don't think that needs to change. investment income has always been referentially treated in the tax code, for 100 years. >> with good reason. >> it is under this tax code as well. there is a good reason for that. investment income is already taxed in a number of ways under the tax code. corporate tax. it is double taxed or triple tax currently. so those rates on shareholders should be reduced from where they currently are. >> maybe if you raise income taxes -- notes, reading for your one of the interesting things i thought was you say that this proposal is "good and achievable." i thought that was interesting. it's not great though, right?
3:09pm
you mentioned the things that make it achievable. it is revenue neutral. maybe some people think that is a plus. it contains progressive and he. that is something you could argue across party lines. what makes this a great traffic -- what makes this a great tax-cut proposal and why don't we see that? >> there was the revenue too.ality box in 1996, reform will have political constraints. a lot of us think that good tax reform will raise economic growth and you would see revenue flow from that. the so-called dynamic scoring and just a much you count that. under conventional models, you go with the static scoring. you look at the boxes they are in right now, it makes it harder. lowering rates, you've got to find trade-offs for that. it can be very challenging.
3:10pm
the same thing with progressivity, with the fiscal cliff or you have higher rates on folks. it would just a politically impossible. i think the chairman put out a alteringout radically the progressivity of the cuts. >> we will see if there is momentum. thanks so much, will and gordon. do not miss it. tomorrow we will be joined by congressman dave can't. tomorrow -- congressman dave camp. right here on "street smart." there has been such an amount of loan availability for people to go to school, and there is some thought -- if you have tax incentives, will that drive the education cost up as well? >> yeah, the word incentive makes me uneasy.
3:11pm
i would just like everyone to pay his own share of taxes and do the rest, what you like. i think flatter would be a good idea. this is only my personal opinion, not those of bloomberg llc. >> up next, adam is going to give us a little insight and action into what you can do with your portfolio.
3:12pm
3:13pm
3:14pm
>> welcome back to "street smart ." i am matt miller. five big stocks. one big similarity. adam johnson has your insight and action. egg stocks, one common denominator. take a look at these five names and mris them. look at the performance over the past year. all right? way better.
3:15pm
market leaders. why are these companies leading? byse were the companies sold ned davis research. ned davis doug little deeper. at they have found earnings growth and earnings revision strategies lead to outperform its after the market makes an all-time high. recently value strategies have underperformed. back in the 1990's, when things were the cheapest, that was what we bought. nothing is really cheap anymore. you have to see which ones are beating expectations. that is what upward earnings revisions are all about. all 12 of these companies have earnings growth of at least 20%. the analysts have upped -- at have uppedalysts -- their estimates. we are talking about gilead,
3:16pm
michael kors, priceline. i found a total of 24 companies. go to @ajinsight. by the way this group, up about 10% year to date. this is how you win in this market. >> all right one company that would love upwards revisions is jcpenney. turnaround said its was beginning to take old, after that company announced a number of cost saving measures. sales rose for the first time into a nap years. right now we are joined by a retail analyst for more on jcp. what should we think about this company? is a turnaround possible? have you seen the worst of it, liz?
3:17pm
a turnaround is certainly possible. i do not know if we will see a lot of evidence of it in this quarter. i think it will be a difficult quarter to measure whether jcpenney is actually seeing a turn. >> how long is it going to take? theoretically? depends on what you are aiming for. i think you will see positive sales in 2014, and we are seeing them in the fourth quarter. they have been announced they are seeing mostly positive comps for the fourth quarter. in terms of getting back into earnings territory, i think that could take a couple more years. the couple weeks ago company announced it was going to replace its cfo, the chief financial officer. it strikes me that manager changes drag on a little bit
3:18pm
longer as far as achieving new goals. sometime new managers bring new goals. don't they want to stay away from that for a little while and have a common set of managers until the shift has been -- until the ship has been completely write it? -- completely righted? ? ideally that would be the case. i think in this case it is the seated cfo becoming fatigued. he has done a tremendous job. it has been a difficult couple of years. he has turned over the reins. reality of the positions. there has been chatter about investors wanting to see a new ceo. i actually think that mike oldman is doing a great job and would like to see him continue. on,f only he had stayed right? >> yeah, but you can't rewrite history. >> sadly. thanks so much, liz. we will bring in those numbers as soon as --
3:19pm
pollution in hitting record highs in china from capital this week. is beijing becoming completely uninhabitable? is there anything you can do but where an astronaut suit? stay with us. ♪
3:20pm
3:21pm
3:22pm
>> breaking news, everyone. on ukraine's debt. a olivia sterns joins us with details. >> secretary of state john kerry has said that the united states will guarantee a $1 billion loan to ukraine. they are also considering direct aid to ukraine. the trouble though, trish, is the ukraine needs about 35 to $10 to be solvent. and theou -- the eu
3:23pm
united states have been debating this. they have said they will commit one billion dollars, but obviously nowhere near the amount of money ukraine needs to come back from the brink of default. kovacic now onh the run somewhere in ukraine. kovacic ent victoriana vich on the run somewhere in ukraine. ukraine is taking steps forward to put together a new government that could come into place tomorrow. the u.s. guaranteeing a one billion dollar loan. not enough though. they need $35 billion. trish? >> shifting focus to beijing. the notorious air-quality there has reached hazardous levels for
3:24pm
a seventh consecutive day before the national people's congress. air pollution is the number one cause of complaints and will dominate discussion of the communist meeting. stephen engle reports. >> we in the media like to use cute terms like airpocalypse or airmageddon to describe the air-quality in beijing this week. but perhaps it was the government that put it best, calling the air-quality "uninhabitable," a conclusion as clear as the air should be. how bad is the air in beijing? >> [muffled speaking] particulates pose the greatest risk to human health. maximum exposure
3:25pm
the world health organization recommends. >> it is a problem. it can cause problems. it can form cancer, which is the most severe consequence after many years. to bronchitis, to infections. the system is actually impacted by the dad pollution. --they are not exempt. it is not just the air you up to worry about in beijing. -- the groundr water is polluted as well. up to three quarters of surface water in china is unsuitable for drinking. it's quite disgusting, actually. then there are the multiple cases of food safety issues in china and the closure of wet markets like this, slaughtering chickens, due to their association with avian
3:26pm
influenza. it all leads to the question, is beijing a toxic place to live in? >> i can't say that beijing is a toxic place to live in. there are days like this that are really, really bad. but in many ways, you can adjust your life to protect yourself. there is air pollution, you can stay inside. >> and you run your air. ate -- your air purifier full blast. , do days like this one actually the air intake is too injured 45 cylinders. but here is the biggest crime for the crime. today, a doubling of asthma and emphysema patients.
3:27pm
it seems that everybody was getting the message. aboutn engle, bloomberg -- bloomberg, beijing. >> i would not raise a family there. that would be mean. i would get scuba gear, an astronaut suit. >> we'll be right back. ♪
3:28pm
3:29pm
3:30pm
damageoin is in need of control again. prosecutors are investigating possible criminal violations after they went off-line earlier this week without returning about $400 million worth of the clients fund. they try to quell the masses this morning, publishing on the site "i would like to reassure everyone that i am still in japan and working very hard to find a solution to our recent issues." no word on where that $400
3:31pm
million is. it's a lot of people would like to know. -- which a lot of people would like to know. but bit point does have a lot of sad investors betting on its future, like mark andreessen, the winkle boss twins -- i do not know what size they are. >> they are very tall. >> but maybe the most important is berry filbert. that may just be what bitcoin needs for legitimacy. worst of all, thanks for coming in. secondly, i thought it was interesting, the timing of your announcement that you are going to start your own bit point exchange right when mount cox and theyexchange down, bought lots of weed to hide in their apartment. who knows? >> this is entirely coincidental.
3:32pm
we were planning on doing it next week, but when we heard the rumors we thought -- why not counterbalance the storm that we saw coming? >> how does it work? >> we are setting it up in an interesting way. we are looking at the stock exchange model with a number of firms regulated to tap into this exchange in close collaboration with a number of banks and regulators. >> this is interesting. i said this to you earlier, that there needs to be regulation in the market to trust it. you made the point and made it again that part of the appeal is that it is not regulated. how can you have a currency that is not regulated when it could be victim to situations like we have seen? >> well, my question is, of the currency itself, it cannot be regulated. someone told me this morning that they should shut it down. how? shut off the internet?
3:33pm
>> would you not feel better? i would feel better to know that you were working with regulated banks. activities have to be regulated. one, the exchanges. and then any companies that hold customer funds, like banks, should be regulated. i do not think that minors or urchins should be regulated, but the banks a bit point and the exchanges. >> the interesting thing here is that you have started an exchange before that have a lot new asset class to be traded on the exchange and you were very successful. >> and we did it in a regulated way. if you work with the regulators -- >> but with a fight, first, right? when you first said that you are going to trade pre-ipo shares of facebook i remember facebook not being cool with that to begin with. >> you can describe it as a fight, it was just the industry trying to come to terms with the
3:34pm
idea that an ipo is not the only and best way to get liquidity. what has happened over time as it has become very common for these tech companies to use second market to provide liquidity for stakeholders. in this new exchange business we decided up front to work with the banks, the bit coin industry, and regulators on day one. >> this theoretically solves the liquidity issue, right? if you want to take a bit point aside, it is challenging. >> it is a fragmented business. if you want to sell or buy a lot, -- >> there is a guy on 40, broad street, selling. that problem. we are going to do this is where looking at the gold market and we want to slow
3:35pm
down the price discovery process , may be running a once or twice per day option where the price is not change for another day. the idea is to slow down the intraday volatility where the price of coffee is five percent higher or lower. >> could you not do this with some other current see? >> we will set it up in a way where any member of the digital exchange wants to make a market, it could be on the exchange, but i think that it coin is the winner and the focus at the outset is going to be focusing on bit going to dollar exchange. >> but you will be able to trade other digital currencies. exchange,mber-based all the regulated entities -- >> a lot of it is how it begins as a democratic process. >> kind of. >> why do you need it coin if you could use paypal or some other mobile payment system?
3:36pm
>> i think that bit point is potentially going to transform the way that money moves around the world, the way that people think about money. people talk about payments being disrupted. i personally feel that bit point is becoming a fantastic alternative to gold. has a lot of the attributes of gold. what it has that goal does not is utility. as you know you can go buy beer. >> i spent a week only spending bit coin. it was not incredibly easy and i did not pay phone bills. did buy pizza. >> i bought the whole office pizza. --some 50,000 merges merchants. tickets, videone games at gamestop, victoria's secret stuff. if you're so inclined. >> and you were, apparently. >> it is a digital currency that is not going away and banks
3:37pm
understand that exchanging one he forbid currency is a service they will have to -- think abouto key to a payment that we do not consider today. like machine payments that we will have to deal with at some point, like driverless cars. >> but what is interesting here is how people like yourself are coming out and saying that we would embrace some regulation here. >> absolutely. relation done properly is not bad. the only way they will be successful is if they work within the successful space. way, senator joe mansion came out and called for a sort of crackdown on bit coin in a letter that he wrote to regulators. you do not always think of democrats in west virginia as the economic giants of our society, but he is a very smart and honorable man, i assure. what do you think about his
3:38pm
comments? >> from what i read how it is similar to senator schumer from a few years ago. if you read his recent comments, he has come to appreciate the possibility of bit coin. senator carter has well has come out very positive on that. >> what about western union, in the long run? >> they will have to incorporate it into the business. i want them to be founding members of the exchange. their are going to reduce margins, though. >> it is going to happen either way. >> you could see transaction costs go down but transactions rise. listen, we could talk about it all day, especially me, so thanks for coming in. i really appreciate it. >> all right, good stuff. this company, j. crew, you wear that stuff? public, than private, then public again. another ipo? that is next. ♪
3:39pm
3:40pm
3:41pm
3:42pm
>> j. crew is in talks with thes about possible ideas, retailer may set valuation on as much as $5 billion. the market could be rife for retail review, they are on a tear this year, outpacing the s&p. this is not the first time they have been down this path. correspondent,us julie hyman, is with us. they have been through all of this before. this is a walk down memory lane for them. >> not the first time. or the second time.
3:43pm
such a process. >> it is a hard time. it is the worst of it, retail has been a tough area. we saw an increase in revenue turningr nine percent around the gap, notably, he came around and turnaround j. crew. the ipo is happening tomorrow coming out of the holiday season, presumably later in the spring, which one would think would be a better time for something like this to happen. >> retail feels like a tough laggard sector, unless they have a really vibrant online
3:44pm
component. >> j. crew does. i did that this morning before we realized they were doing the story. they have a pretty decent online presence. in retail, i was talking to tom keene this this morning, it really matters who you are. for example, in electronics or some other space where amazon killed everyone anyway, that is a different story than retail, where american eagle and abercrombie and fitch will do poorly, but j. crew is still seen as a winner. >> and they are diversifying geographically, opening stores in hong kong, asia, london. >> how happy is mickey drexler about being in london? >> i feel like he thinks it is even better than the u.s.. >> what does going public actually mean for this company right now? >> it is largely going to be a
3:45pm
benefit for the pe backers. a lot of private equity backed companies are doing these quick turnarounds lately, which in the past has signaled a real frothy environment with companies going public after only one year of being held private. it would be a real benefit for them to start exiting right now while the ipo market is hot. they could get a decent valuation, presumably. $5 billion is what people said they were looking at. which is sizable. >> the question that people have, some cultures are very adverse to private equity. the germans call it locus. >> some people say that they do a great thing, they by companies in bad shape, turn them around, put them back on the market. others think that they play the stock market cycles correctly. things are out of favor, they pick them up and sell them on the wave. >> they get paid millions of dollars to time that correctly. sometimes it works out,
3:46pm
sometimes it does not, but it seems to be paying off for these private equity sponsors. >> in the case of j. crew, when they took it private or last time there were multiple lawsuits involved that there was somehow collusion to get it at a cheaper price. those kinds of lawsuits are not entirely unusual, they do happen fairly frequently -- read only when private equity gets involved, but in this case there was a settlement between the folks who were suing and the company. >> interesting stuff. >> interesting stuff indeed, leslie. thank you. >> we are going to continue with the interesting and bizarre. credit suisse, burned by a u.s. report, helping american clients. how will it impact the banks bottom line? we will discuss what "street smart" continues. ♪
3:47pm
3:48pm
3:49pm
3:50pm
thomas00 accounts shielded by the irs, credit suisse executives have plenty of questions answer in the wake of a report released yesterday. phil mattingly was on capitol hill for the hearing into tax evasion. brady dugan is the latest major bank ceo to face off with carl levin. what was his message to lawmakers? he said that the top executives were deeply regretful and did not deny it had occurred. he said the top executives were never aware of it. that was quite enough for senator carl levin. take a listen to what he had to say. >> for me, the bottom line is that your bank is a bank that really wants to be seen as a reformed bank. in your opening statement you laid out the reforms you had made. so, that is something that is
3:51pm
important to you. thedo not want to be in dirty business any longer of helping u.s. clients cheat on their taxes. you ares important, if going to really be a reformed bank, you have got to acknowledge what is clear in our report, that the wrongdoing went beyond a small group of local bankers. >> that was the one major split throughout the hearing. senator carl levin said that as many as 1800 employees knew about this. dugan never swayed from where he was, saying it was a small number of people and no executives ever knew about it. >> the hearing is not over. the committee is hearing from top officials right now. do we have any idea where the justice department's investigation really stands? >> that is the interesting point right now, trish. there is an ongoing investigation.
3:52pm
the justice department is investigating about 14 banks for tax evasion. credit suisse is one of them. we know that there were early stages of negotiations earlier this year, lots of numbers being tossed around regarding a criminal sentiment. the big question is what the report does to the negotiations. senator croll 11 is more than willing to send these reports to the justice department. how this affects that investigation and those negotiations? that will be big big question in the next couple of weeks. >> let me just ask you -- i was going to ask you about phil dugan and some other executives, but i will leave that for another time. >> from lincoln upgrade to options, top 10 stocks coming up next. plus in the next hour, selling out or making a survival play? we will look at the crafty business on "street smart" we will be right back. quote --. ♪
3:53pm
3:54pm
3:55pm
3:56pm
>> we are about three points shy of that all-time record on the s&p. we need to get to 1848 or 1845, right now. we are going to be too caught up right now on the only stocks that you need to know about today. time for the top 10. after the home improvement chain announced a plan to buy back 5 million dollars in shares, fourth-quarter profit rose 6.3% as the housing rebound spurred sentiment. >> first solar, down nine percent after posting a
3:57pm
climbing quarterly profits. solar panel manufacturers said that profits fell as revenues in the power plants came from revenue in the southwest. >> chesapeake, shares down five percent after they missed analyst profit estimates by their negative -- biggest margin in two years. leases and cutt jobs rose. >> number seven, dollar tree, gaining four percent despite fourth-quarter profits climbing seven percent as severe weather and a shorter holiday failed dollar tree in a weak forecast. >> number six is linkedin, shares are up, rbc recommended buying the stock, they rose the rating on the company to outperform from sector reform. >> number five is dreamworks, down 12%, reporting that fourth-quarter revenue fell 23% after home-video sales of .turbo," missed estimates
3:58pm
>> did you see it? >> i did not. this is the show on netflix? >> movie. >> wait, we have small children. you did see it? >> i have not. >> is about cars and racing. >> it is about snails, actually. >> well, yes. but i have seen the show on netflix. >> is it good? >> no, not at all. >> it is a good concept. the little snail that could, right? >> i mean, i clicked on it. >> there you go. fourth-quarter profits beating estimates at abercrombie, buying back one hundred $50 million in the fourth quarter. >> number three, arrow post all, gaining six percent, working with barclays to explore options
3:59pm
on the sales of convertible notes and preferred stocks to a private equity firm. so, not improving the product offering. >> they are under pressure from shareholders, actually. cablevision, up four percent as revenue topped estimates, the company reported its operating cash flow was up 49%. cash flow is something that people buy these cable providers for. >> getting to our number one , barnes &he day noble, jumping four percent after posting $60.3 million in third-quarter profits. the company is cutting spending and its digital unit, with job cuts announced earlier. this all settles out. looks like right now we are not able to get to the new record on the s&p. just a few points shy of 1846. that looks like the level we are at right now.
4:00pm
the dow jones industrial average closing out the day at 16,206. [closing bell] is the level. >> but we are close. about today is that retailers were doing really well. even on the face of it, the numbers that we got were not that fantastic. we are waiting for numbers from jcpenney. the bats are that that will not be fantastic either. and jcpenney at a very strange day. they plunged earlier in the day, ending the day up i five percent . i do not know what that says. >> which is fantastic, right? just less than expected? >> just less bad. with jcpenney, the bar is low. >> i just wonder if customers are really coming back. they had a pretty loyal customer base. >> 40 years ago. >> it got worse with the onset
4:01pm
of no more sales and a very different kind of shopping experience. all of those people that were there, you drove them away. now you have no one and you are trying to bring those people back and doing it your discounts and coupons. >> which is what you were doing before. that alienated the customers in the first place, when they got rid of those. >> who likes coupons? >> i don't get the whole daily deal site, but people are into that. >> time for the roundup, stories we are talking about ahead of tomorrow's open. >> can i just -- >> here is what? >> this is what i want to do. >> you sit over there. >> you forgot your blue tie. >> i feel like one of these things belongs to the other. >> can we talk about jcpenney for a minute? we are starting to get the numbers, the company says the comparable sales rose by two percent. quarter after quarter we have
4:02pm
been seeing the sales falling and big decreases to boot. this two percent increase in sales is in line with estimates, they are now saying that in the first quarter their comparable sales will rise again. you are coming from a really low base here where they lost a lot of customers and traffic and sales. so, that is what they are coming out with on that side of the company. they are also saying that they are losing more than was estimated, coming in at $.86. you know that matt and i always talk about companies managing expectations, but the traffic trends really are important. >> good companies manage expectations, right? >> sales in the mid-single digits, i think i will keep going to see if we have numbers in terms of liquidity and cash position, because that is key here. the company's business has to turn around enough so that is not out of cash by the end of the year. that is the big concern.
4:03pm
if you get a two percent number, is that enough? you need to see an acceleration. >> right. >> but in the first quarter they say they will be picking up a low base on the first quarter sales. >> what were the numbers like? >> how could you not do better, seriously? two percent? from such a horrible year last year? three percent of five percent? >> the comps were down early two percent last year. to see a two percent rise after that kind of a plunge, you are looking at a progression that we have seen getting better. >> they say that the liquidity is going to be over $2 billion by the end of the year. in theory, if people take them seriously, that is better than analysts have been looking for. you can see the stock benefiting from these headlines coming out. by the way, just this year the stock, not even two months of
4:04pm
20, down 37%. >> we have seen a plunge bumping up the end of the day. think about that, that is the plunge we have seen, the pessimism baked into this retail. the question is -- is there a place for jcpenney in the american landscape? a place for sears, which comes out tomorrow morning, in the american landscape? >> there could have been. you have the luxury on the lower end with everything else being the online trend. if you are that middle-of-the-road retailer? there isfor you to be there. >> array was on earlier and he was saying -- would customers really be devastated if sears or jcpenney disappeared? >> absolutely not. >> i like sears.
4:05pm
can buy tools there. >> but you can buy those at home depot. >> one of our cameramen went out today to take some footage of the sears in new jersey. it was a smaller format store. he went into the store, did not hear -- see any people but heard a clicking sound. there was a man working out on the workout equipment in the store. one is out because no around. he went to the front of the stores, there was one saleswoman. those were the two living human beings. >> not even enough salespeople to police the fact that people are working out on -- on their exercise equipment. >> which kind of says it all, right? jcpenney is sort of in the same boat. >> it brings up a whole other issue, by the way, on activism. did bill ackman put the nail in the coffin with this one? >> let's be clear about
4:06pm
something having to do with jcpenney, jcpenney was in trouble before ron johnson came in. maybe he exacerbated -- not maybe, he exacerbated the troubles, but it was already troubled when he came in. we should make that clear as well. let's talk about another retailer that is having some troubles moving packs their next target. target came out of the prophet decrease of 46%. years rose the most in 45 earnings came in better than estimated, managing expectations, it seems that target is now moving past the confidence issues. the company is talking about its main priority being reinstalling the confidence of consumers. the theme today, more broadly, seems to be that there is more optimism around retail, seriously.
4:07pm
january butto formal weather and expected, it affected target as well, every hope springsthere internal, i guess. i do not know that there is a lot of evidence of that. first of all, target is dealing with people being afraid to have their credit cards swiped. >> just bring a bit point. >> if only. >> how would people use that point? >> 80,000. >> that is not a big percentage of the global population. >> you are just talking about registered wallets. >> one interesting thing that you see in those numbers is the fact of everything they did to try to regain customer loyalty in the wake of the data breach is actively working. speaking of discounts.
4:08pm
>> it could happen to anyone, though. tohave they put the card is is, like other countries? it would not happen to anyone who was seriously security minded. they simply were not. it was not one of their priorities. .> but they still have them >> i think that their struggles are not over. we will continue to watch, they have a lot of brand image. >> to be clear, all retailers will be happy once the snow melt. >> so alive. moving on, carl icahn said on his website that he will lay out a full detailed business case to separate ebay and paypal in the coming weeks. they have been talking about spinning off paypal and agitating for it. carl icahn escalated his attack on ebay, john donahoe, and the board of the company, calling
4:09pm
them dysfunctional and riddled with conflict, something that he said to us just recently on monday. you know have -- you now have ebay firing back in a statement saying that carl icahn does not let the truth get in the way of a good story. his letters may be entertaining, but they are not factually accurate. i think he did say bull on our air, right? they say that he seems to be deliberately disseminating dead wrong claims. i just have to say, it is kind of a weird conflict of interest, right? to have a board where the members are advising your company, but yet they have a hand in all these other things? in general they have a lot of them. >> not just technology. if you are talking about reforming boards? >> someone on the board of
4:10pm
general motors owns a stake in volkswagen. >> peter cook. >> that would never happen. >> i do not think that alan mulally would like the idea of someone having a stake their. >> i will come out against it. >> what i am actually saying is that mark andreessen, right, he was on the board of ebay when they sold off skype. and then he profited handsomely himself. cook, right? they make things like turbotax. >> we definitely have his complaint here with cook. scott cook. has investments in like five other different mobile payment systems. so, how does he have the best interest of paypal in the view has allicahn, if he these other investments? problem in silicon
4:11pm
valley. >> and a great saga. absolutely fantastic. he was not wrong, carl icahn is entertaining. ukraine, president? , put on the international wanted list. ousted, of course, by parliament on saturday. there has been a manhunt looking for where he is hiding. murderow wanted for mass , connected obviously with the shooting deaths of protesters and he have. both sides killed people, but this guy drew the short straw. a new prime minister was named, but i believe that that is just for a short time. they will have elections. who are they going to get? >> princess leia, we will call her. has a very big following, yes, but is also very polarizing.
4:12pm
>> this new prime minister, the opposition has expressed formal support for, he is the head of the party. >> how formal is it? a bunch of guys saying yes? not that formal. >> right. you know what i think is incredible that i read today about how divided this country is? lam, somewhere in the eastern part of russia or the ukraine, where the russian speaking people live. >> rush already, right? >> apparently he did not even learn ukrainian until he was in his 30's. >> i wonder if he is going to end up working with edward snowden. if vladimir putin has a lodge for dissidents. >> would russia actually taken? >> is their fault that he is in the situation he is in. >> they are taking other people
4:13pm
that we do not like, like snowden. >> not all of us do not like ed snowden. >> i mean that not me personally, but the united states of america. so, we shall see. >> an odd couple, if they ended up in the same two-bedroom apartment. >> a good show. >> ♪[hums attune] beware, jpmorgan chase is moving 2000 employees to offices in the metro tech center in brooklyn. they are consolidating real estate as they push is -- is a push to trim expenses and simplify by exiting certain businesses. they are getting out of private equity and consolidating. the metro tech center is like where it is at. this is really in demand. >> the brooklyn? >> you live in bronxville. you think the whole world
4:14pm
revolves around bronxville. office space in brooklyn is 96% occupied. 93% in manhattan. is further sold out in brooklyn. >> not only that, you are getting high demand for office space in lower manhattan to where desirable workers live. we are sayingt here? >> does it go that far? >> is that the new soho? >> it has probably always been, no offense, cooler than tribeca. happyare going to stay and tell you why your favorite beer might be a sellout for "street smart." ♪
4:15pm
4:16pm
4:17pm
>> all right, craft beer. aying those two words makes beer connoisseur celebrate. did you know that your favorite
4:18pm
beer might not be as hip as you thought? our very own matt miller has been doing cap -- doing all kinds of research. >> for 25 years i have researched this story. i have always liked the idea of drinking a small beer from brewer who has maybe been around. there is a family recipe, you know? >> you are romanticizing it, in a way. >> exactly. i have never been into the idea -- i have been in situations where i could drink 20 cans of budweiser, but i never loved that idea. >> you are not a keg guy? >> i like keg stands, actually, that i like the idea of small craft brews and one of the beers that i thought was a microbrew was anheuser-busch. goose island was one of my favorites, and we looked in to find out what other beers you
4:19pm
might have thought were craft brews and were owned by budweiser or by miller, coors. i think we have lists of them, if we can pull up the screen grab. top, you may have known. but belgian white? were they acquired? or did they just create them? >> in most cases they are acquired. and they have a special way of hiding the craft brew. there are a number of belgian brewers. killian's, irish red, that is an old brand you would have had to get to acquire at some point. i am shocked to find it. >> what is wrong with this? do people actually care? >> people do care. evidenced by the fact that the big companies, budweiser, miller
4:20pm
coors, they are creating little holding companies in which to put these craft beers. when you go to line up on the hold -- the homepage, it does not say miller coors. you see something like green lake distributors. inre has been a massive rise craft beers. i think there are 3500 registered breweries in the u.s.. maybe 4000. in 2013. were added a huge growth industry. >> also joining us to talk about this year, brinkley's manager and resident year expert, brinkley's being across the street. the watering hole that matt likes to frequent. i am sure you know him well. what is going on here? customers really prefer the craft brew? >> specifically be kerry all local brews and we try to, you know, carry only those who started small in-state.
4:21pm
you know, we want to see the breweries grow, see everyone succeeded. we have been lucky enough to have them for a long time. do almost all local brews right? 60th, between lexington and third, if you want. >> you can see him hair -- there. >> but that does not stop you ownsstocking a beer that one of these megacorporations? >> it might come in the future. now that we are thirsty. but it has brought in many customers for us. now they are owned by volkswagen. >> i shudder to think that some german engineer is down there
4:22pm
designing the next superbike, but that is not the way it works. they let them do their own thing. that is the case with the brewers as well. >> that is what we are told. we have shaken hands with these people. they help us to cell phone we like to sell and we have a face to the brand and product. it is nice. >> when he started sam adams, he went from bar to bar in boston with his truck. he went and talked to people like yourself, trying to convince them to take his brand. >> it is an awesome thing to be a part of. it is great to be in my position where the rumors come in. i have been looking up the old breweries. theyyear in westchester invited me up there to go brew with them and bring in a barrels of a specialty beer. >> and now you stock it? you >> we drank it all. we drink captain lawrence a lot, and we look forward to keeping
4:23pm
it. home county.om my >> excellent. jamie, thank you. we will be right back. ♪
4:24pm
4:25pm
4:26pm
>> it is 26 minutes past the hour, meaning that bloomberg television is on the markets. not a lot going on today as far as the indexes are concerned. did we have music from the markets? >> there we go. cue the music. >> at this time we have the record intraday, but then came back down and finished the day there at 1845. the record is 1848. >> i feel like that is close enough. >> a lot of retailers moving a lot today. we also saw delia's,
4:27pm
for example, a huge retailer up 14%. barclays, financing, gaining quickly. back into. ♪\
4:28pm
4:29pm
4:30pm
>> is america finally winning the battle against the bulge? obesity on young children fell over the past decade according to a new report. these results may offer hope for the future, but not all subsets of the population are making progress. 78 million adults are obese and their rates have largely remained the same. when it comes to trimming the waistline of america, jillian michaels has been on the front
4:31pm
line, having built a health and wellness empire including cable tv shows, endorsements, and new york times bestsellers. she joins us now from los angeles. welcome. >> thank you very much. >> you are about to embark on a speaking tour across the country. what are you going to tell audiences about reversing the obesity echoed -- epidemic? >> honestly, the show is not actually about building a better body, it is about holding a better life. when i view our physical health i see it as a platform for us to build our life on top of. when you are strong physically, you are strong in every facet of your life. fitness and health are simply a function and tool to help you feel empowered. it is about looking at the big picture. >> it needs to start early, does it not? we saw these encouraging numbers amongst the young. we have a report today that to ride obama is trying
4:32pm
schools across america of logos related to junk food. how important is policy like that were our schools, do you think? >> honestly? i think it is potentially helpful, certainly less harmful, but if we were talking about real food policy, there would be other changes i would want to see happen first. i would rather see subsidy dollars going to small, organic farms so that healthy foods are more affordable instead of crops like corn and soy, which go to making heavily processed foods that greatly contribute to obesity. we could talk food policy all day long, and while i think every little bit helps, there are certainly far greater changes that should be prioritized. >> is the main problem just that we as americans eat unhealthy --d and massive qualities quantities? 78 million obese adults is a shocking figure.
4:33pm
why? how? meanss is something that -- needs to be combated on them. affronts. we can look at this regarding food policy and say that cheap food that is unhealthy is affordable, and sure, people can afford healthy food, so there is definitely that argument. the hope is that healthy food will become more affordable over time. but the real reality is that at some point we cannot wait for big food or a business to come along and save us. we have to take personal accountability. eating less food does not cost us more money. getting outside and walking is free. the big solution here is a simple one. we eat less, we move more. that is accessible and affordable. the bigger question is -- how come many of us are not doing it? i do a dress that during my show. but it is a question he have to
4:34pm
ask ourselves. it is about inspiration and information. >> i imagine that inspiration is a big part of it. i would think that people need to stay inspired to keep weight off. you have an inspiring story yourself. tell us what you went through to lose weight. >> for me in my life i do not think it is a secret in my career at this point, people know that i was an overweight kid. i was 170 pounds at 12 years old. 50 pounds overweight, five foot tall. top of that, though, i often tell the people that i work with that anywhere you are at that is law -- rock bottom, i have likely been there. i have been an unhealthy relationships, in jobs that i hated, overweight. i am not a genius. there is nothing unique or special about me. if i can turn these teams around, so can anyone else. it is a matter of taking a good,
4:35pm
hard look at your life and making a decision that the work associated with the change is worth it. >> does not sound like something i would have a lot of faith in americans doing. i mean, don't you feel like our role models are obese? television, movies, they are obese. is jet -- it is generally accepted to be ok to be massively obese? what do you think? >> when it comes to it being ok? look, does it mean that a person has equal value as an individual? are they lovable? of course they are. the question is, looking at someone like james get all three need, whose children are now growing up without it had, is that ok? that is a tragedy for his kids and that would be the argument i would make to someone who is unhealthy. why would you want to lose years of quality and quantity with
4:36pm
your family? television orut the big screen, of course the academy awards are coming up around the corner. you see actors doing all kinds of extreme things in order to get a role or to be right for a role. take a quick look at this piece that we put together about the weight loss and gain that it takes to win an academy award. we are curious to get your thoughts about hollywood and weight issues, right after this. ♪
4:37pm
4:38pm
>> those people in hollywood will do all sorts of crazy stuff. what is your reaction? do people go to extreme measures that you think are too extreme? or is that just part of working life in los angeles? >> sure. i would say that i know for a fact at least some of these actors, if not all -- i cannot say all, because i do not know, do this under the supervision of a medical doctor. does that mean that it does not take a toll on their health? of course it will. when you starve your body down
4:39pm
to 130 pounds, which i think matthew mcconaghy did at his fight, it will be very difficult on a system. the hope is that these guys are doing and while they are being medically supervised so that it does less damage, so god for bid , nothing serious happens to them. with that said, nobody in my position or in the health industry, for that matter, would ever recommend it, but when you are an artist it is very difficult to rationalize that to them. i would say to the layman that these dramatic fluctuations in weight are dangerous and something that you should have no reason to engage in. >> jillian michaels, take you very much. good luck on the tour. get them to watch that weight. >> she is amazing. >> i should say. i am in really good shape. >> we will talk about that. we will talk about that. ♪
4:40pm
4:41pm
4:42pm
4:43pm
>> we just got some breaking news out of tesla. >> hey, tesla has come out with details about their plans to build an enormous new factory, pretty cool, it will be one of the world's largest battery factories with tesla trying to scale up production, building the batteries having been a challenge, this is their solution and they say that they will be investing $4 billion to $5 billion to build the factory. earlier today they had a bond sale and said the profits from that would go toward building this new factory. the factory would be able to help tesla scale up to produce 500,000 cars per year, creating about 6500 jobs, it is going to bring down the costs of producing those battery packs by 30% over the first year.
4:44pm
tesla has currently been outsourcing the battery packs, but this new factory is their solution. they themselves have invested $2 billion overall by 2020. the stock is up 70%, year to date. sticking with tesla, yesterday the company's model was named best overall car by consumer reports, helping it rally the stock. businessweek dug into the numbers and discover that car wars are a lot a lot little hasue trophies, everyone got one. >> consumer reports, that's a little bit different, right? >> i don't know. by the way, your story is fantastic. >> thank you. >> it is amazing and i did not realize how many awards jd powers gives out.
4:45pm
>> jd powers gives a lot, let's start with consumer reports. they have best overall car, tesla model s. consumer reports had 10 best cars. best luxury car, best sports sedan, best green car, best compact car. is a just one big award? >> best overall. camel of these other cars out with commercial saying that they were the best car. >> in class, which is the key. you start the story with it, they have like 68 before you can get to the safest. >> there are 68 individual bests the jd power gives out. trucks. 11 safest >> there were 11 safest trucks of the year. >> i want to know what the safest is. there is top 11, or honorable
4:46pm
mentions. so many sometimes the no one wins. >> is this just because at the end of the day they want car companies advertising? >> they have commercials for the awards that they want. >> let's roll the video to see that. magazine named pontiac car of the year. >> car of the year. >> car of the year. awesome. >> import car of the year. >> car of the year. >> 10 best list every year. >> the 10 best, mercury. >> the car line for initial quality. >> the rolls-royce, most appealing in its class. >> highest ranked far in initial quality. >> the 2012 motor car of the year. >> highest ranked among premium cars. >> two years in a row.
4:47pm
>> 10 drivers, 10 best, the truck of the year. >> the premium car from jd power. >> more top safety rated cars than any other brand. >> everybody gets something. >> we thought that it seemed as appealing as a soviet apartment building, the volkswagen. >> that was in the commercial, they are the best. >> is that is what is behind it? money? if you are "consumer reports," you want tesla or -- , allink about these public of these motor trend, something where they buy the magazines and go to the websites. maybe they give them exclusive access later. becauseanies like it
4:48pm
the awards legitimize their products. >> you guys should start your own award things for cars. you are super into cars. you can give matt miller number one truck and then i know it is the number one truck. >> i am actually going to detroit tomorrow. >> awesome. >> i will bring a camera crew. >> thank you very much. >> go to business week and read that story, or follow me on twitter. >> do you have an underscore? twitter, but he will be telling us about what is next on "taking stock." >> i was going to talk about the bus, but now i am on to cars. the defense summit at washington, d.c., we have the latest from the ukraine as well as pending changes to the u.s. military budget. william cohen will be joining me to give me more details, he
4:49pm
served as secretary of defense under president bill clinton. outside the banks, they are talking about skateboarding. we have tony hawk, the legend from state wording, turning the sport into a mega-million-dollar business. all of that and more coming up at 5 p.m. eastern. more "street smart," next. ♪
4:50pm
4:51pm
4:52pm
>> we were talking about an overhaul of the tax code and whether or not it has any legs. that is tomorrow and we will talk some more about it. >> that is good. it has been a long time since we have had comprehensive tax reform bills. >> all the way back to the 80's, right? >> back when the giver was in office. >> 86. >> maybe they can bring ronald reagan back to life. >> we will see. on. >>tony hawk comes that is awesome. >> that's right.
4:53pm
stick around, everyone. ♪
4:54pm
4:55pm
the hour, meaning that bloomberg tv is on the markets. let's get you caught up on how the markets ended the day's session. not a lot of movement in the dow and the s&p, trading above record high from earlier today, finishing pretty much flat now, the nasdaq up by 1/10 of one percent. we got some better-than-expected data on existing home sales, hitting their highest level in five years. it has been a tough time for the bears hovering near the all-time highs. they seem to be taking a beating
4:56pm
, i am joined by nikolai from "bloomberg news." they seem to have been erased pretty quickly. for the past four days introduce -- intraday trading keeps on retreating. what is going on? >> for the past four days we have been running in the morning for a selloff. this is the third day in a row we have failed on that record. there is this wall right around between the bulls who are saying that we will get a combination on the economic data and, later on, we just need to keep pushing stocks higher and other people saying not to push the stocks so fast, that we are going to go much lower, that this is just a part of the process. >> you say the bears are getting hammered right now. back in january, six percent, at that point hedge funds were at their highest levels since 2012,
4:57pm
now they are getting bruises? >> exactly. they piled in when the s&p 500 was not selling off. they kind of got the timing wrong on that. in february the market had already recovered. 5.8%, whichwas at was amazing, if you spoke to anyone out there. it was an incredible speed with which the market recovered. one of the fastest market when you look at the 19 selloffs of the bull market. rebounding in the market by nine weeks. >> that is a lot quicker. >> much quicker than nine weeks. >> it bears arguing, what is their case? >> the direction in this case was always that it was much more appealing. they are saying that corporate earnings are stretched and that
4:58pm
we just went through u.s. earnings season where some companies are beginning to benefit from restructuring valuations, from ben bernanke he did jenny allen. a very sensitive moment in the u.s. economy. in the u.s. it just did not meet expectations. >> not only are traitors betting on benchmarks going in the wrong direction, you say that they are also betting specifically on these very wrong stocks. >> exactly. the timing is wrong, as we just spoke about, but they are also getting the stocks wrong. >> one third of the shares. >> that is right. yet the stock just use rallying. this is the same thing with athena health.
4:59pm
that stock is up 44%. >> incredible. thank you so much. it is hard to not think that tesla is going south, but morgan stanley came out and double their price target. think you so much. that is it for "on the markets." ♪
5:00pm
of "taking stock from washington, d.c. on this wednesday, february 26, 2014. i was a partisan than at the bloomberg defense

Terms of Use (10 Mar 2001)